Facebook's parent company Meta Platforms recorded an earnings surprise in the third quarter, driven by labor cost reductions and growth in online advertising revenue.
On the 25th (local time), Meta announced that it posted revenue of $34.15 billion (approximately 46.2391 trillion KRW) and earnings per share of $4.39 (approximately 5,944 KRW) for the third quarter.
Both revenue and earnings per share far exceeded market expectations. According to financial information firm LESG, Wall Street's average revenue estimate was $33.56 billion, and the earnings per share estimate was $3.63. Compared to the same period last year, revenue increased by 23%, and earnings per share rose by 168%.
The improvement in online advertising revenue had a significant effect. Meta enhanced the efficiency of targeted advertising by integrating artificial intelligence (AI) technology into online ads to promote products tailored to customers' preferences. CNBC explained, "Based on massive investments in AI, the efficiency of online advertising has been improved."
The cost savings from restructuring were also analyzed to be substantial. Total costs and expenses for the third quarter were $20.4 billion, down 7% from the same period last year. Meta undertook large-scale cost reductions by restructuring 20,000 employees this year. As of September 30, Meta had 66,185 employees, a 24% decrease compared to the same period last year. Regarding the total expected expenses for this year, Meta provided a forecast of $87 billion to $89 billion, lowering its previous estimate of $89 billion to $91 billion.
For the fourth quarter revenue, Meta provided guidance of $36.5 billion to $40 billion. The market is forecasting $38.85 billion.
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